The Trueblood Case Studies

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The Trueblood Series cases and solutions are available in Adobe PDF format below. Solutions are password protected for faculty use only. Access to solutions by other unauthorized individuals is strictly prohibited. To find out how to obtain access to the case solutions, please contact us via email or mail a request on your school letterhead to:

Deloitte Foundation
Ten Westport Road
Wilton, CT 06897

Due to the issuance of certain new accounting literature, changes in the status of ongoing projects during the last year, or evolution of practice, addenda have been added to a number of the existing cases. Please refer to the “Addendum” column in the index below to determine if a case has been updated. A link to the 2008 Addenda Summary can also be found at the bottom of this page. Because an addendum may affect the solution for a case study, you should review the updated solutions. NOTE: Only the 2009 cases have been updated for recent changes in authoritative literature. The remaining cases are in the process of being updated and a new addendum for 2009 will be posted by the end of September/early October.

As many of you know, the FASB Accounting Standards Codification (ASC) was launched on July 1, 2009, and is effective for interim and annual periods ending on or before September 15, 2009. The ASC is a reorganization of current U.S. GAAP into a topical format that eliminates the current GAAP hierarchy and replaces current GAAP (other than rules and interpretive releases of the SEC) with just two levels of guidance, authoritative and nonauthoritative. Once effective, the ASC is expected to be the single source of authoritative GAAP in the United States. The 2009 Trueblood cases on this website are updated to reflect the ASC references and also continue to contain the former U.S. GAAP standards references in brackets to facilitate the transition to the ASC.  We have retained the original references to the SEC’s Staff Accounting Bulletins, speeches, AICPA Accounting and Auditing Guides and other materials that are either omitted from the ASC or are not included in their entirety. See the FASB’s ASC Web site (asc.fasb.org) for access to, and additional information about, the ASC. NOTE: Only the 2009 cases have been updated for the new Codification. The remaining cases are in the process of being updated and will be posted by the end of September/early October. 

The nonexclusive right to reproduce material contained in these cases without explicit written permission is hereby granted to faculty in connection with classroom use, academic research, and other educational endeavors of a not-for-profit nature.

2009 Case Index

Case: 09-1 Velocity Cellular
Download: Case | Solution
Type: Revenue recognition
Subject: Accounting for revenue arrangements with multiple deliverables. The case requires students to question the existence of multiple deliverables.
Applicable courses: Intermediate or Graduate

Case: 09-2 Pharmgen Pharmaceuticals
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Type: Funded R&D
Subject: Understanding the implications of and accounting for R&D funding arrangements. The case focuses on the difficulty of deciding how to account for R&D contractual arrangements.
Applicable courses: Intermediate or Graduate

Case 09-3 Venturing Into Consolidations
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Type: FIN 46(R)/ Consolidations 
Subject: Applying the principles of accounting for Variable Interest Entities to Joint Venture arrangements. The case focuses on identifying variable interest entities and determining which standards to apply.
Applicable courses: Advanced or Graduate

Case 09-4 Needs Space
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Type: Lease accounting
Subject: Accounting for asset retirement and similar obligations imposed under the terms of a lease agreement.
Applicable courses: Intermediate or Graduate

Cases: 09-5 and 09-5(a) Pit Stop Closed/Sold
Download: 09-5 Case | Solution  09-5(a) Case | Solution
Type: Discontinued operations
Subject: Determining whether an asset disposal qualifies for presentation as a discontinued operation.
Applicable courses: Advanced or Graduate

Case: 09-6 UpBeat, Inc.
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Type: Transfers of financial assets
Subject: Accounting for the transfer and servicing of financial instruments. The case requires students to determine whether particular provisions preclude sales treatment.
Applicable courses: Advanced or Graduate

Case: 09-7 Auto Corporation
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Type: Impairment
Subject: Accounting for asset impairments. The case asks students to determine the appropriate asset groupings to assess impairment and to identify matters to consider when testing the recognition and measurement of impairment.
Applicable courses: Intermediate or undergraduate auditing if covering either the accounting or auditing components separately; Graduate course integrating accounting and auditing

Case: 09-8 Classified Information
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Type: Income statement presentation
Subject: Issues related to the appropriate placement of items in the income statement. The case is designed to illustrate some common issues related to income statement presentation.
Applicable courses: Intermediate or Graduate

Case: 09-9 Bricks & Mortar
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Type: Income taxes
Subject: Accounting for uncertain tax positions. The case illustrates the judgments involved in applying FIN48.
Applicable courses: Intermediate or Graduate Accounting or Tax course covering FIN48 

2008 Case Index

Case: 08-1 - Go With the Flow, Inc.
Download: Case | Solution
Type: Cash flows
Subject: Determining the classification of transactions in the Cash Flow Statement in accordance with SFAS 95.
Applicable Courses: Intermediate
2008 Addendum: No

Case: 08-2 - Sooner or Later
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Type: Stock compensation 
Subject: Understanding the implications of performance measures in the accounting for share-based compensation.
Applicable Courses: Intermediate or graduate course
2008 Addendum: No

Case: 08-3 - Hedge Documentation
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Type: Derivatives
Subject: Identifying deficiencies in hedge documentation under SFAS 133 and understanding the implications for hedge accounting. 2008 2008 Addendum: No
Applicable Courses: Graduate
2008 Addendum: No

Case: 08-4 - The Bear Minimum
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Type: Lease accounting
Subject: Identifying minimum lease payments.
Applicable Courses: Intermediate
2008 Addendum: No

Case: 08-5 - Sell-It Products
Download: Case | Solution 
Type: Segment reporting
Subject: Analyzing selected financial statement data to identify operating segments and determining which of those are reportable segments.
Applicable Courses: Intermediate or graduate
2008 Addendum: No

Case: 08-6 - The Rump Organization
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Type: Pension/OPEB accounting
Subject: Understanding the difference between voluntary and involuntary employee termination benefits and the related accounting implications.
Applicable Courses: Intermediate or graduate course
2008 Addendum: Yes

Case: 08-7 - Data Trappers, Inc.
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Type: Audit-Independence
Subject: Evaluating the implications of previously performed non-attest services for a prospective audit client.
Applicable Courses: Auditing
2008 Addendum: No

Case: 08-8 - Gainey Auto, Inc.
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Type: Fair value
Subject: Understanding the Fair Value Option and the implications on the financial statements of its adoption for various assets and liabilities.
Applicable Courses: Advanced accounting or Graduate course covering SFAS 157 & 159
2008 Addendum: No

Case: 08-10 - Chocolate Rocks Accounting Errors
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Type: Materiality of errors
Subject: Evaluating the treatment of identified accounting errors in interim financial statements in accordance with SFAS 154 and SAB 108.
Type: Auditing or Graduate course integrating financial accounting and auditing
2008 Addendum: No

2007 Case Index

Case: 07-2 Western Aluminum
Download: Case | Solution
Type: Accounting
Subject: Treatment of changes in accounting principle. Requires a judgment as to the preferability of one accounting method over another when making a change. Assuming that the change is preferable, it requires calculating the financial statement impact of the change.
Applicable Courses: Graduate course if entire case is used. Could be shortened for use in intermediate accounting.
2008 Addendum: No

Case: 07-3 Columbia On-Line Networks
Download: Part 1: Case | Solution  Part 2: Case | Solution  Part 3: Case | Solution | Handout 1 |  Handout  2
Type: Accounting
Subject: Recognizing revenue in arrangements with multiple elements, accounting for long- term executory contracts, and audit considerations with respect to revenue recognition (with an emphasis on identifying round-trip transactions).
Applicable Courses: Intermediate accounting or undergraduate auditing if covering either the accounting or the auditing components of the case independently. Graduate course integrating financial accounting and auditing.
2008 Addendum: No

Case: 07-4 Murray Compensation
Download: Case |  Solution
Type: Accounting
Subject: Accounting for modifications to share-based payment awards. Requires the calculation of share based payments including the impact of reducing the exercise price.
Applicable Courses: Intermediate accounting or graduate course.
2008 Addendum: No

Case: 07-5 Springbok Corporation
Download: Case | Solution
Type: Accounting
Subject: Identifying the accounting literature that applies to long-term incentive plans.
Applicable Courses: Requires research of the accounting literature to determine which literature appropriately applies to long-term incentive programs.
2008 Addendum: No

Case: 07-6 Graphic, Inc.
Download: Case |  Solution
Type: Accounting
Subject: Identifying and evaluating evidence to determine the appropriate income tax valuation allowance. Requires applying judgment in assessing the evidence that would impact the need for a valuation allowance related to deferred tax assets.
Applicable Courses: Intermediate accounting or graduate course.
2008 Addendum: No

Case: 07-7 Porky's Revenge
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Type: Accounting
Subject: Determining the lease commencement date. Focuses on a major issue in accounting for leases, but one which had often not been appropriately applied, resulting in incorrect accounting for many leases.
Applicable Courses: Intermediate accounting or graduate course.
2008 Addendum: No

Case: 07-8 Hurricane William
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Type: Accounting
Subject: Accounting for anticipated insurance recoveries. Focuses on the judgments related to accounting for a contingent asset, in this case an insurance recovery.
Applicable Courses: Intermediate accounting.
2008 Addendum: No

2006 Case Index

Case: 06-2 Convertme, Inc.
Download: Case |  Solution
Type: Accounting
Subject: Derivatives (determining whether or not a convertible contains an imbedded derivative)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 06-4 Fast Car, Inc.
Download: Case | Solution
Type: Accounting
Subject: Consolidation (related party lease and determination whether an entity is a variable interest entity)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 06-5 Manini Manufacturing
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Type: Accounting
Subject: Revenue Recognition (revenue recognition in a multiple element sales arrangement)
Applicable Courses: Intermediate or graduate – revenue recognition
2008 Addendum: Yes

Case: 06-6 Elite Running, Inc.
Download: Case | Solution | Handout
Type: Auditing
Subject: Preliminary Analytical Reviews (identification of client business and industry risks and related industry procedures)
Applicable Courses: Undergraduate or graduate auditing
2008 Addendum: No

Case: 06-8 Sell Soon, Inc.
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Type: Accounting
Subject: Disposal of Long-lived Assets (recognition of costs related to a disposal of long -lived assets)
Applicable Courses: Intermediate - fixed asset disposal
2008 Addendum: Yes

Case: 06-9 Stocks for Cheap
Download: Case | Solution coming soon
Type: Accounting
Subject: Revenue Recognition (revenue recognition with a minimum revenue guarantee)
Applicable Courses: Intermediate - revenue recognition
2008 Addendum: No

Case: 06-10 CheckMate
Download: Case | Solution
Type: Accounting
Subject: Cash (appropriate accounting for cash disbursements)
Applicable Courses: Intermediate - cash transactions
2008 Addendum: Yes

Case: 06-12 Outsourcing Services, Inc.
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Type: Accounting
Subject: Deferred Costs (accounting for upfront contract origination costs)
Applicable Courses: Intermediate - expense recognition
2008 Addendum: No

2005 Case Index

Case: 05-1 It’s Close Enough, Inc.
Download: Case | Solution
Type: Accounting Auditing
Subject: Earnings Quality (assessing the appropriateness of the accounting methods chosen by a client and more desirable alternatives)
Applicable Courses: Integrative case for graduate course
2008 Addendum: No

Case: 05-2 Minority, Inc.
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Type: Accounting
Subject: Financial Instruments (joint venture, put option granted to one of the venturers)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 05-3 CherryPop
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Type: Accounting
Subject: Consolidation (Application of FIN46R to an interest in a joint venture to determine if it is a variable interest entity)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 05-5 Guarantees-R-Us
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Type: Accounting
Subject: Contingencies (FIN45 and accounting for contingencies under financial guarantees)
Applicable Courses: Graduate
2008 Addendum: No

Case: 05-6 Centcom, Inc.
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Type: Accounting
Subject: Consolidation (consolidation in accordance with the guidance under IFRS)
Applicable Courses: Advanced or graduate
2008 Addendum: Yes

Case: 05-7 Ace Company
Download: Case | Solution | Exhibit
Type: Accounting
Subject: Derivatives (equity instruments with multiple components)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 05-9 Spend More
Download: Case |  Solution
Type: Accounting
Subject: Stock Compensation (accounting for compensation costs under different stock option arrangements)
Applicable Courses: Intermediate - stock options or graduate
2008 Addendum: No

2004 Case Index

Case: 04-1 Total Computer, Inc.
Download: Case |  Solution | Examples 1- 6 
Type: Accounting Auditing
Subject: Inventory Audit Confirmation (appropriate audit evidence regarding inventory reserve and accounts receivable amount)
Applicable Courses: Undergraduate or graduate auditing
2008 Addendum: Yes

Case: 04-4 Three Little Pigs, Inc.
Download: Case | Solution
Type: Accounting
Subject: Inventory (assessing and reporting of impairment of inventories - LOCOM)
Applicable Courses: Intermediate - inventory valuation
2008 Addendum: No

Case: 04-6 Power Station
Download: Case | Solution coming soon
Type: Accounting
Subject: Lease Accounting
Applicable Courses: Intermediate - leases
2008 Addendum: No

Case: 04-8 Drug King
Download: Case | Solution
Type: Accounting
Subject: Derivatives (accounting for assets transfers with related puts and calls)
Applicable Courses: Graduate
2008 Addendum: Yes

Case: 04-9 Healthcare Depot
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Type: Accounting
Subject: Goodwill Impairment Issues (goodwill impairment and identification of reporting units)
Applicable Courses: Intermediate - intangibles or graduate
2008 Addendum: No

Case: 04-10 Cashless, Inc.
Download: Case | Solution
Type: Accounting
Subject: Debt (accounting for both the costs related to the issuance of convertible debt and the impact of a contingent put)
Applicable Courses: Intermediate - long-term debt or graduate
2008 Addendum: Yes

2003 Case Index

Case: 03-5 – Part 1 Trademark, Inc. Part 1
Download: Case | Solution
Type: Accounting Auditing
Subject: Client Integrity (earnings management and assessing client integrity)
Applicable Courses: Undergraduate or graduate auditing
2008 Addendum: No

Case: 03-5 – Part 2 Trademark Inc. Part 2
Download: Case | Solution | Handout 1 | Handout 2 | Handout 3
Type: Auditing
Subject: Client Integrity (audit procedures related to assessing potential misstatements related to earnings management)
Applicable Courses: Undergraduate or graduate auditing
2008 Addendum: No

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